Long Term Solutions to the Short-Term Problem: An Analysis ...

Belmont Law Review

Volume 6 Article 8

2019

Long Term Solutions to the Short-Term Problem:An Analysis of the Current Legal Issues Related toAirbnb and Similar Short-Term Rental Companieswith a Proposed Model OrdinanceRichard W.F. SworBelmont University - College of Law

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278

LONG TERM SOLUTIONS TO THE SHORT-

TERM PROBLEM:

AN ANALYSIS OF THE CURRENT LEGAL

ISSUES RELATED TO AIRBNB AND SIMILAR

SHORT-TERM RENTAL COMPANIES WITH A

PROPOSED MODEL ORDINANCE

BY: RICHARD W. F. SWOR*

ABSTRACT

Airbnb and the short-term rental market have revolutionized the way

that we travel and book accommodations, and now they are beginning to

require cities to revolutionize their laws. This note argues that cities should

adopt an ordinance that addresses health and safety, zoning, permitting, and

taxation in an enforceable way by drawing on ideas already implemented in

other cities such as Chicago, San Francisco, Nashville, and Portland.

In support of this conclusion, this note begins in Section I by

discussing the history of vacation rentals and the sharing economy as a

whole, before discussing Airbnb more specifically. Section II then provides

an overview of some existing problems such as zoning, registration of

properties, and taxation that cities are facing with the rise of short-term

rentals. This is followed by Section III, which analyzes some existing short-

term rental ordinances and how cities are dealing with these specific

problems. Section IV delves into some of the limited case law that involves

this short-term rental market in order to demonstrate additional legal

* Belmont University College of Law (2019). Thank you to Professor Jeffrey Usman for his

help throughout the writing and editing process of this note. Additional thanks to Professor

Elizabeth Usman for teaching me how to write, Professor Amy Moore for continually

frightening me into becoming a better writer, Professor Travis Brandon for encouraging my

interest in property law, and Professor Lynn Zehrt for your continual mentorship. Thank you

to Margaret Darby, Emily Lamb, and Cate Pham for inspiring my interest in this topic.

Thank you to the staff members who worked diligently on this note, particularly Sarah

Martin, Sara Diehl, Marisa Garcia, and Grace Cooley. Sallie and Sammy Swor, Lauren

LeStourgeon, and Joseph Kiley all deserve extra thanks for their continual support and for

listening to me talk about short-term rentals endlessly for months. Dedicated to Daniel

Wiseman Rochester.

2018] SOLUTION TO THE SHORT-TERM PROBLEM 279

considerations. Then Section V will provide a Model Ordinance for the

regulation of the short-term rental market that Section VI will further

advocate for specifically.

ABSTRACT ................................................................................................ 278 I: AN INTRODUCTION TO SHORT-TERM RENTAL PROPERTIES ................. 279

A. A History of Vacation Rentals and the Sharing Economy ... 280 B. Sharing Economy Generally ................................................ 282 C. Airbnb and Other Short-term Rental Companies ................. 283

II: EXISTING PROBLEMS ........................................................................... 286 III: EXAMPLES OF EXISTING CITY ORDINANCES ..................................... 289

A. Health and Safety ................................................................. 289 B. Zoning .................................................................................. 292 C. Permitting ............................................................................. 294 D. Taxation ................................................................................ 297 E. Enforceability ....................................................................... 298

IV: LEGAL ISSUES .................................................................................... 300 A. Anti-Monopoly ..................................................................... 300 B. Contractual Issues................................................................. 301 C. Freedom of Speech ............................................................... 304 D. Unconstitutional Vagueness and Ambiguity ........................ 305

V: PROPOSED MODEL ORDINANCE .......................................................... 306 VI: REASONING FOR PROPOSED MODEL ORDINANCE ............................. 311

A. Health and Safety ................................................................. 311 B. Zoning .................................................................................. 313 C. Permitting ............................................................................. 314 D. Taxation ................................................................................ 315 E. Enforceability ....................................................................... 315

VII: CONCLUSION .................................................................................... 316

I: AN INTRODUCTION TO SHORT-TERM RENTAL PROPERTIES

While it has changed greatly with the advent of the Internet and

mobile apps, short-term rentals have existed to some degree for centuries.1

The first part of this section focuses on important historical developments to

the vacation rental market. The second part of this section then looks at the

general sharing economy, while the third part gives some history and

background information about Airbnb and other online, short-term rental,

property-specific websites.

1. See Christine Dayao, The Rise of the Vacation Home: From a Single Lodge to a

$85 Billion Industry, SHERMANS TRAVEL (Mar. 30, 2015), https://perma.cc/UZG8-7SJK

(discussing the early history of vacation homes back to the 1600s).

280 BELMONT LAW REVIEW [Vol. 6:1: 278

A. A History of Vacation Rentals and the Sharing Economy

Short-term rental properties and home sharing apps are better

understood by looking at the history of boardinghouses and the development

of the vacation rental market. Before vacation rentals were commonplace in

American society, boardinghouses were an important part of American

history.2 Boardinghouses were places to stay where a large variety of people

would rent rooms and eat together.3 With people moving into bigger cities in

the 19th and 20th centuries, “boarding houses . . . served as places for new

residents to get their city sea legs without immediately wading into the melee

of the apartment-hunting game.”4 Not surprisingly then, these

boardinghouses were usually concentrated near downtowns.5 Social

historians estimate that in the 19th century, between one-third and one-half

of urban residents either took in boarders or were boarders themselves.6

Boardinghouses served as a great alternative to long-term rentals or

buying.7 More importantly, beyond being a place to stay cheaply when

travelling somewhere in which you did not have family or friends,

boardinghouses were an early form of affordable housing.8 However, “[a]

tightening net of ordinances and codes have helped squeeze

[boardinghouses], and related housing choices nearly to extinction.”9 Despite

this, while the screening process is much more extensive, boardinghouses

still exist to some degree in large cities like New York City.10

In addition to boardinghouses, there is a market that is perhaps more

comparable to short-term rentals that has developed recently: the home rental

market. The home rental market is functionally and economically similar to

the online short-term rental market.11 This industry has grown with

technological advances, from the telegraph to the telephone to where it is

now with the Internet.12 Whether it be renting a home to stay in on a yearly

basis or booking and renting an online vacation lodging, the basic economic

2. Ruth Graham, Boardinghouses: where the city was born, BOSTON GLOBE (Jan. 13,

2013), https://perma.cc/2JV5-FJA6.

3. Id.

4. Jessica Leigh Hester, A Brief History of Co-Living Spaces, CITYLAB (Feb. 22,

2016), https://perma.cc/A7GY-EMZA (further noting that these buildings also were

historically considered “brick-and-mortar chastity belts, cast in the role of protecting

women’s virtue against the city’s vices).

5. Alan Durning, Rooming Houses: History’s Affordable Quarters, SIGHTLINE

INSTITUTE (Nov. 14, 2012), https://perma.cc/JB74-5SVG.

6. WENDY GAMBER, THE BOARDING HOUSE IN NINETEENTH-CENTURY AMERICA 3

(The Johns Hopkins University Press, 2007).

7. Id.

8. Durning, supra note 5.

9. Id. (referencing restrictions on room rentals, bed rentals, shared housing, building-

by-building mandates, and off-street parking).

10. Hilary Stout, Where the Boys Aren’t, N.Y. TIMES, Nov. 5, 2009, at E1.

11. See Priceonomics Data Studio, The Rise of the Professional Airbnb Investor,

PRICEONOMICS (Feb. 2, 2016), https://perma.cc/G5D4-86W6.

12. Dayao, supra note 1.


model is paying a set periodic amount to be able to stay in the home or

apartment.13 Even though Airbnb is contemplating expansion into longer

term rentals, these short-term rental websites are still used almost entirely for

booking vacations.14

The concept of a vacation home traces back to the mid-1600s with

King Louis XIII’s “hunting lodge,” also known as the Palace of Versailles.15

Vacation homes developed from only the wealthiest enjoying vacation travel

to the 1800s, when vacationing in friends’ homes became much more

popular.16 It was custom during this time in Europe to ask friends to use their

vacation homes using letters delivered by horse-and-carriage.17 However, it

was not until the invention of the telegraph in 1837 that vacation rental

bookings really expanded, allowing faster communication between potential

renters and homeowners.18 The industry, which was previously primarily

European, took off in the United States in the mid-1900s, with rentals being

advertised in newspapers and by telephone through real estate agents.19

With the vacation rental industry growing in the second half of the

twentieth century, the Vacation Rental Managers Association (“VRMA”)

was founded in 1985.20 VRMA exists to “advance professionally-managed

vacation rentals as a safe, reliable option for consumers” by providing

education, information, research, and more to its members.21 As technology

has advanced, it is only natural that the vacation rental industry has prospered

with the Internet, like so many other industries.22 In 1995, a single condo in

Colorado was available for rent as the Internet’s first Vacation Rental by

Owner.23 This market was expanded in 1996 when a small division within

Microsoft launched online travel booking site Expedia.com.24

13. See generally F.T.C., Renting an Apartment or House, https://perma.cc/K4SU-

W2CU (last visited Aug. 17, 2018).

14. See Olivia Zaleski, Airbnb Explores Expansion in Long-Term Home Rentals,

BLOOMBERG TECH. (Mar. 8, 2017), https://perma.cc/ZA29-YVHN.

15. Dayao, supra note 1; see also Kristen Martinelli, Everything You Need to Know

About the Vacation Rental Industry Part 1, FUTURESTAY, https://perma.cc/V88N-9WEM

(last visited July 12, 2018).

16. Dayao, supra note 1.

17. Id.

18. Id.

19. Id.; see also Martinelli, supra note 15.

20. See VRMA History, VACATION RENTAL MANAGEMENT ASSOCIATION,

https://perma.cc/QPT2-CLWU (last visited Jan. 28, 2018).

21. See About the Vacation Rental Management Association, VACATION RENTAL

MANAGEMENT ASSOCIATION, https://perma.cc/42W3-5GJK (last visited Jan. 28, 2018).

22. Martinelli, supra note 15.

23. Id.

24. See History of the Online Travel Industry Pioneer, EXPEDIA INC.,

https://perma.cc/4WUS-B8RH (last visited Jan. 28, 2018).


B. Sharing Economy Generally

It was only natural that the growing popularity in online vacation

rentals would come to a head with the rapid development of the sharing

economy.25 While many economic models are based on ownership, this

economic model instead focuses on access to resources such as a car or a

home.26 The basics of this model are “early instances of a future in which

peer-to-peer exchange becomes increasingly prevalent, and the ‘crowd’

replaces the corporation at the center of capitalism.”27 Two big examples of

this sharing economy are Uber and Airbnb.28 However, this economic model

is not really new.29 In fact, “prior to the industrial revolution, a significant

percentage of economic exchange was peer-to-peer.”30

While Airbnb, which is the focus of this note, will be discussed in

detail below, it is helpful to look at Uber, another industry giant. Uber, which

launched in 2009 as a means for hailing premium black cars in a select few

cities, has since evolved to provide car service similar to taxis in many cities

across the globe.31 In fact, as a driving service, Uber has become so popular

that its impact has been “absolutely detrimental” to the traditional taxi

industry.32 However, the mere existence of Uber is dependent upon people

being willing to share their automobiles and drive strangers around, yet

whether these drivers are employees of Uber is a question without a definitive

answer.33

That question of whether the people providing the actual service are

employees or independent contractors is common across the sharing

industry.34 Using Uber as an example, the economic model is dependent on

the companies themselves providing people a means to find someone to drive

them, but the company is in turn dependent on the drivers.35 While Uber

25. See generally PIA A. ALBINSSON & B. YASANTHI PERERA, THE RISE OF THE

SHARING ECONOMY: EXPLORING THE CHALLENGES AND OPPORTUNITIES OF COLLABORATIVE

CONSUMPTION ix-x (Praeger 2018).

26. See Anastasia, An Introduction to Sharing Economy, CLEVERISM (Mar. 5, 2015),

https://perma.cc/J8UX-6APN.

27. ARUN SUNDARAJAN, THE SHARING ECONOMY: THE END OF EMPLOYMENT AND THE

RISE OF CROWD-BASED CAPITALISM 2 (The MIT Press 2016).

28. See Sonya Mann, These Companies Are Winning the Sharing Economy, and

Investors Want In, INC. (Mar. 15, 2017), https://perma.cc/F2EC-US4S.

29. Sundarajan, supra note 27, at 4.

30. Id. (“The trust needed to make economic exchange possible came primarily from

social ties of different kinds.”).

31. Our story, UBER, https://perma.cc/WP3Z-UZJ4 (last visited Jan. 28, 2017).

32. Georgios Petropoulos, Uber and the Economic Impact of Sharing Economy

Platforms, BRUEGEL (Feb. 22, 2016), https://perma.cc/NDK3-5UBX.

33. See Omri Ben-Shahar, Are Uber Drivers Employees? The Answer Will Shape the

Sharing Economy, FORBES (Nov. 15, 2017), https://perma.cc/BN8U-KGPA.

34. Id.

35. See generally id.; John Patrick Pullen, Everything You Need to Know About Uber,

TIME (Nov. 4, 2014), https://perma.cc/3ZFW-68NK (“[t]o drivers, [Uber is] basically a

referral services”).


settled a case in 2016 that allowed drivers to stay freelancers, this is an

important debate that may be settled in the very near future and change much

of this sharing economy.36

On one side of the debate, this allows Uber to continue to “sidestep

the costs of full-time employees,” including benefits such as a guaranteed

minimum wage, insurance, share of Social Security, and other worker

protections.37 However, on the other side of the argument, some drivers

“value their independence” in selecting when to work, as well as the ability

to drive for multiple companies simultaneously.38 With all of the concerns

facing these revolutionary technologies, it is only natural that some cities

have embraced these economic models while others have attempted to stifle

them with regulations.39

C. Airbnb and Other Short-term Rental Companies

Airbnb began in 2008 when a couple of roommates who needed

some extra cash rented out some air mattresses in their loft and provided

breakfast to their guests.40 As of 2017, Airbnb has since turned into a $31

billion company, the second most valuable start-up company in the United

States behind Uber, and the biggest of the home sharing apps.41

Airbnb provides a website for hosts to share their spaces with guests,

allowing individuals to book destinations in 190 countries and more than

34,000 cities.42 This model is similar to the traditional hotel model, except

that there is no more a dedicated staff to check customers in, clean their

rooms, or provide them with room service.43 Instead, Airbnb is a house,

condo, apartment, or other lodging that an individual owns and rents out to

36. Mike Isaac & Noam Scheiber, Uber Settles Cases With Concessions, but Drivers

Stay Freelancers, N.Y. TIMES, Apr. 22, 2016, at B1. See generally Tad Devlin & Stacey

Chiu, Is Your Uber Driver or Lyfter an Employee or Independent Contractor and Why Does

It Matter?, KAUFMAN DOLOWICH & VOLUCK (June 2017), https://perma.cc/9MAK-4E56.

37. Isaac and Scheiber, supra note 36. But see Insurance: How you’re covered, UBER,

https://perma.cc/Y7Z7-3N7K (last visited Apr. 29, 2018) (explaining that drivers are

covered by Uber’s insurance policy in certain situations while driving, but not when driving

for personal use).

38. Isaac & Scheiber, supra note 36.

39. Joanna Penn & John Wihbey, Uber, Airbnb and consequences of the sharing

economy: Research roundup, JOURNALIST’S RESOURCE (June 3, 2016),

https://perma.cc/V4CE-FC6Z.

40. Biz Carson, How 3 guys turned renting an air mattress in their apartment into a

$25 billion company, BUS. INSIDER (Feb. 23, 2016), https://perma.cc/UP2R-UHJK

41. Rani Molla, Uber is the most valuable U.S. startup, with Airbnb and WeWork

following far behind it, RECODE (Aug. 8, 2017), https://perma.cc/VN9P-RQX4.

42. See generally How to travel, AIRBNB, https://perma.cc/3J9C-H6M4 (last visited

Jan. 28, 2018) (discussing the basics of Airbnb booking for potential customers).

43. See Elaine Glusac, Hotels vs. Airbnb: Let the Battle Begin, N.Y. TIMES, July 20,

2016, at TR3.


interested guests.44 The hotel manager is now simply the owner and operator

of his or her own dwelling.45 While this model may at first seem like simply

a young vacationer’s dream, recently it was reported that 31% of people who

use Airbnb have actually used it for business.46

Airbnb in its terms and services specifies that the company “does not

own, create, sell, resell, provide, control, manage, offer, deliver, or supply

any Listings or Host Services.”47 Therefore, hosts are responsible for their

own listings.48 Instead of hosts sending the renters a contract and waiting to

receive a signed copy, “[w]hen members make or accept a booking, they are

entering into a contract directly with each other.”49 Airbnb specifies that it is

not an agent, but that it “may” help facilitate dispute resolution.50

Additionally, Airbnb does not guarantee “the existence, quality, safety,

suitability, or legality of any listing,” nor the “truth or accuracy of any Listing

descriptions.”51

There are a variety of distinctions between the different models of

short-term rental properties, but one important distinction is “owner-

occupied” property versus “non-owner-occupied” property.52 Owner-

occupied involves a residence associated with the principal resident on the

same lot.53 Airbnb itself goes further in options, providing the distinctions of

“shared rooms,” “private rooms,” and “entire homes/apartments.”54 “Shared

rooms” and “private rooms” are usually part of the owner-occupied model,

in which the rental is not of the entire house or apartment, but rather a single

room of the resident’s dwelling.55

It is worth noting that there are still hundreds of different listing sites

for short-term rentals.56 While Airbnb has arguably become the most well-

known, Booking.com, HomeAway, and TripAdvisor are considered major

44. See generally How to be an Airbnb host, AIRBNB, https://perma.cc/UN8G-WLER

(last visited Jan. 28 2018) (giving hosts a broad overview of how to begin using their

residence as a short-term rental property with Airbnb).

45. See generally id.; Local destinations for a global community, AIRBNB,

https://perma.cc/F7KH-Z3EP (last visited Jan. 28, 2018) (both discussing general host and

guest features of using Airbnb).

46. Glusac, supra note 43, at TR3.

47. Terms of Service, AIRBNB, https://perma.cc/8GL8-YMJS (last visited Jan. 28,

2018).

48. Id.

49. Id.

50. Id.

51. Id.

52. See NASHVILLE, TENN., SUB. ORDINANCE NO. BL2016-492 (Feb. 22, 2017),

https://perma.cc/NS37-WXH6.

53. Id.

54. What does the room type of a listing mean?, AIRBNB, https://perma.cc/D7C9-

QX26 (last visited Jan. 28, 2018).

55. Id.

56. Third Party Distribution Channels: The Changing Landscape of Third Party

Booking Channels, VRM INTEL (Jan. 29, 2016), https://perma.cc/6TFK-QREM.


competitors.57 Booking.com allows people to book “everything from

apartments, vacation homes, and family-run B&Bs, to 5-star luxury resorts,

tree houses, and even igloos.”58 In 2006, HomeAway purchased Vacation

Rentals by Owner (VRBO), another short-term rental website, and thus

commands a large share of the market.59 However, according to

HomeAway’s CEO, the company does not consider Airbnb direct

competition because HomeAway focuses on renting houses “based on an

annual homeowner subscription model,” which requires renters to pay a

yearly fee to keep their property listed, while Airbnb is a “platform for people

looking to scrape together a few extra bucks from renting a room[.]”60

TripAdvisor, which used to be part of Expedia.com before, includes much

more than just home rentals, such as restaurant reviews, ability to book flights

or rental cars, and more.61 TripAdvisor purchased FlipKey in 2008, which

performs similar services to Airbnb.62

Yet, with the rapid growth of short-term rentals, some cities are

facing novel issues unique to the industry, and there has thus been much more

reason to suddenly regulate this market.63 Additionally, some places that

have had restrictions on short-term rental properties for much longer have

suddenly started seeing more enforcement.64 For example, the vacation rental

market has existed in Venice, California “since there was a Venice,” but

actual enforcement of restrictions really started with complaints over

Airbnb.65 Similarly, areas like Tampa Bay that have historically had a lot of

tourism before the smart phone era are now seeing changing regulations to

deal with the new problems that Airbnb and similar companies are bringing.66

57. Id.

58. About Booking.com, BOOKING.COM, https://perma.cc/ED6H-GUMR (last visited

Jan. 28, 2018).

59. Peter Lane Taylor, Watch Out, HomeAway and Airbnb: Here’s Why TripAdvisor

May Be Your Biggest Competition, FORBES (Dec. 7, 2016), https://perma.cc/5HWG-DTFP.

60. Id.; see also How much does a subscription cost?, VRBO, https://perma.cc/EZ52-

EGDD (describing both the costs and the benefits of a VRBO subscription).

61. Will Ashworth, Trip Advisor Continues Its Buying Binge, INVESTOPEDIA (May 10,

2013), https://perma.cc/5MN4-NAQD; see also FlipKey vs. Airbnb, TRIPPING,

https://perma.cc/G6GB-RL6W (last visited Jan. 28, 2018).

62. Id.

63. Vacation Rental Market Growth: Eye-Watering Projections, SMARTHOSTS,

https://perma.cc/E76Y-RUWB (last visited Jan. 28, 2018) (“[Y]ear-on-year growth in the

vacation rental market has averaged 3.6% between 2011 and 2016.”).

64. See Nancy Scola, How 60 Years of Progressive Organizing History is Shaping the

Short-Term Rental Market, NEXTCITY (Dec. 2, 2013), https://perma.cc/G2T2-3GPZ.

65. Id. (“The vacation rental business has been part of Venice since there was a

Venice . . . but it has only been with the rise of airbnb.com and related websites that

complaints have risen to the point where [the L.A. Department of Building and Safety] has

started enforcement.”).

66. See generally Sarah Hollenbeck, Battle brewing over short-term vacation rentals,

ABC ACTION NEWS, WFTS TAMPA BAY (Mar. 15, 2017), https://perma.cc/9C43-NUKM

(discussing concerns over proposed regulations in beach cities that have historically been

tourist destinations).


Regardless of the individual cities’ previous experience or lack thereof in

vacation and short-term rentals, there are numerous problems potentially

worth addressing.

II: EXISTING PROBLEMS

While there are many different aspects of short-term rentals which

require regulation, there are five main problems which are the most pertinent

for cities to address, some of these actually acknowledged by Airbnb.67

The first problem is health and safety. The sharing-economy startups

do not have the same level of regulation as their industry counterparts (i.e.,

taxi-services compared with Uber, or hotel industry compared with

Airbnb).68 This can result in a lack of strictly enforced health and safety

standards.69 Health and safety is a broad category but includes topics such as

cleanliness, parking, fire prevention, and other aspects that would likely be

present if one were to rent with a hotel as opposed to a short-term rental

property.70 There is a concern with short-term rental properties not being

inspected or maintained for cleanliness as a hotel would be regularly.71 One

of the primary benefits of being in a hotel is having a contact person there at

all times, and certain cities have addressed the local contact aspect that is

missing with short-term rental properties.72 Even though Airbnb has

suggestions to keep the home safer, as well as general safety requirements,

some cities have passed more extensive regulations directly targeting health

67. See What regulations apply to my city?, AIRBNB, https://perma.cc/R8QG-UZJ7

(last visited Jan. 28, 2018); see also 5 Key Arguments in Tennessee’s Debate Over Short-

Term Rentals, NASHVILLE PUB. RADIO (Sept. 16, 2016), https://perma.cc/2K36-6M2L.

68. See Jeff John Roberts, Airbnb Faces Scrutiny Over Secret Tax Deals With Cities,

FORTUNE (Mar. 7, 2017), https://perma.cc/HEU2-3DEG (quoting a report on city’s

concessions to Airbnbs about how “[s]ecrecy allows lodging operators to run hotels that

violate zoning laws, avoid public health and safety standards, and reduce the current housing

supply for long-term residents”). See generally David Kemp, Don’t Regulate Uber,

Dergulate Regular Taxis, NEWSWEEK (Sep. 28, 2017), https://perma.cc/7GDH-UUA6; Maya

Kosoff, The story of a man who died in a freak accident during an Airbnb stay reveals a

huge safety problem the startup still needs to solve, BUS. INSIDER (Nov. 9, 2015),

https://perma.cc/2XYV-2UAC.

69. See generally Kosoff, supra note 68. But see Your safety is our priority, AIRBNB,

https://perma.cc/A3XM-A7LQ (last visited Apr. 29, 2018) (giving generalized safety

requirements that Airbnb is “always working to make sure [are] enforced,” such as

“require[ing] that [hosts] refrain from endangering or threatening anyone” and “ask[ing

hosts] to respect others’ property, information, and personal belongings”).

70. See Responsible hosting in the United States, AIRBNB, https://perma.cc/KP4C-

P73J (last visited Jan. 28, 2018); see also I’m a host. What are some safety tips I can

follow?, AIRBNB, https://perma.cc/WL3J-CPAS (last visited Jan. 28, 2018).

71. Kosoff, supra note 68.

72. See CHI., ILL., MUN. CODE § 4-14-040 (2018), https://perma.cc/959V-TT33;

DOUGLAS CTY., NEV., CODE § 5.4.100 (2018), https://perma.cc/T72N-2N36.


and safety concerns, such as Chicago’s requirements of sanitizing and

cleaning dishes after rentals.73

The next problem is how to zone short-term rental properties. While

some cities allow for short-term rental properties practically everywhere,

other cities restrict these properties to certain zones.74 Some only allow

owner-occupied in certain zones.75 Some cities do not allow short-term rental

properties altogether.76 While zoning law has developed over the years and

become engrained as part of United States property law, zoning law was

originally justified in part by looking at the concept of nuisances.77 Therefore,

when considering potential nuisances, without any kind of zoning restrictions

on short-term rental properties, quiet neighborhoods suddenly have short-

term rental properties popping up next door with strangers coming and

going.78

A third problem is putting proper permitting systems in place to

restrict the number, and potentially location, of short-term rental properties.

While this is somewhat tied to the second issue, many of the owner’s

requirements to get a permit to rent their home as a short-term rental are

distinct from just zoning.79 This section will also focus on the owner-

occupied versus non-owner-occupied distinction certain cities have raised,

which has led to litigation.80 Furthermore, the section also touches on the

notice requirement, with some cities requiring a short-term rental property

owner notify the neighbors when applying for a permit.81

73. See CHI., ILL., MUN. CODE § 4-14-040 (2018), https://perma.cc/6ZJX-XED5;

Helping Hosts Make Their Homes Safer, AIRBNB, https://perma.cc/XTL6-MPYJ (last visited

Jan. 28, 2017); Your safety, supra note 79.

74. See Steven Leigh Morris, Airbnb is Infuriating the Neighbors. Is it Time for New

Rules?, LA WEEKLY (Jan. 22, 2015), https://perma.cc/2VYF-RLRT.

75. NASHVILLE, TENN., SUB. ORDINANCE NO. BL2014-951 (Feb. 26, 2015),

https://perma.cc/A9E6-E3TE.

76. See generally Lori Weisberg, Short-term rentals not allowed in San Diego, city

attorney says, THE SAN DIEGO UNION-TRI. (Mar. 16, 2017), https://perma.cc/PWF3-N6GT.

77. See Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 387-88 (1926) (“A

nuisance may be merely a right thing in the wrong place, like a pig in the parlor instead of

the barnyard.”).

78. See Joel Grover, Matthew Glasser & Cole Sullivan, Short-Term Rentals Turn Into

Nightmares Next Door, NBC L.A. (Mar. 1, 2017), https://perma.cc/5WL5-J33V (quoting

neighbors lamenting that “[they]’ve lived here for several years now and the last three

weeks, [they]’re suddenly living next to a hotel”).

79. CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE § 14-6.2 (2018),

https://perma.cc/53R8-F99S.

80. See Anderson v. Metro. Gov’t of Nashville & Davidson Cty. TN, No. M2017-

00190-COA-R3-CV (Tenn. Ct. App. Jan. 23, 2018).

81. CITY OF PORTLAND, OR., PLANNING AND ZONING CODE § 33.207 (2017),

https://perma.cc/Y68W-4HDE.


Permitting prevents what the hotel industry refers to as “illegal

hotels.”82 Nearly 30% of Airbnb revenue is collected from full-time hosts.83

According to one study, there are 2,675 full-time operators who have

properties available to rent more than 360 days a year.84 Additionally, hosts

who have two or more units available to rent account for nearly 40% of the

revenue on Airbnb.85 Requiring permits is one potential way to attempt to

limit this problem.86

The fourth problem is taxation of short-term rental properties and

hosts. This issue really comes down to cities’ relationship with Airbnb.87

Airbnb is willing to collect hotel taxes in certain instances, but some cities

require more information about the guests than Airbnb is willing to provide,

leading to some cities completely forgoing the hotel tax except for self-

reporting citizens.88 However, foregoing this tax opportunity is hard for

cities, because Airbnb already collects over $40 million in tax revenue for

cities that are willing to partner with the company.89

A final problem that also serves to tie all of these together is

enforceability. While all of these areas may not individually seem overly

difficult to regulate, cities must create restrictions that are actually

enforceable.90 This also means that these restrictions must pass legal scrutiny

and not be deemed unconstitutional or against state law, which will primarily

be addressed in Section IV.91 Additionally, these restrictions must not be

overly complex or overly burdensome on agency officials, allowing them the

ability to actually monitor and enforce these restrictions.92

82. Christopher Elliott, Airbnb Runs ‘Illegal Hotels,’ Hotel Industry Study Claims,

FORTUNE (Jan. 20, 2016), https://perma.cc/5A3L-597Q.

83. Dr. John W. O’Neill & Yuxia Ouyang, From Air Mattresses to Unregulated

Business: An Analysis of the Other Side of Airbnb, PA. STATE UNIV. 2 (2016),

https://perma.cc/E85M-Q9M8 (“A growing number of hosts are using the Airbnb platform

to operate an unregulated, full-time business”).

84. Id. at 3.

85. Id.

86. See Elliott, supra note 82.

87. Kai Kokalitcheva, Airbnb to Cities: Cooperate and We’ll Get You Tax Revenue,

FORTUNE (Jan. 22, 2016), https://perma.cc/M9A7-GLB4.

88. Id.

89. Cecilia Kang, Airbnb Takes Its Case to U.S. Mayors Conference, N.Y. TIMES, Jan.

21, 2016, at B1.

90. See generally BRIAN BGUYEN ET AL., DESIGNING ENFORCEABLE REGULATIONS FOR

THE ONLINE SHORT-TERM RENTAL MARKET IN LOS ANGELES, UCLA LUSKIN SCHOOL OF

PUBLIC AFFAIRS (2016).

91. See La Park La Brea A LLC v. Airbnb, Inc., 285 F. Supp. 3d 1097 (C.D. Cal.

2017); Airbnb, Inc. v. City & Cty. of S.F., 217 F. Supp. 3d 1066 (N.D. Cal. 2016).

92. See generally Tim Logan, Can Santa Monica—or anyplace else—enforce a ban on

short-term rentals?, L.A. TIMES (May 13, 2015), https://perma.cc/9A9L-KBZJ.


III: EXAMPLES OF EXISTING CITY ORDINANCES

Cities have addressed these problems in many different ways. While

some cities’ regulations have somewhat matched each other, some

regulations are vastly different city to city.

A. Health and Safety

One of the main differences between a short-term rental unit and a

hotel is the amount of time spent by a staff focusing on health and safety.

However, some cities have addressed this extensively in their regulations.93

Chicago, Illinois is one of the best examples of a city having in-depth

requirements for its operators.94

Chicago Municipal Code section 4-14-040 discusses the legal duties

of operators, many of which relate to health and safety.95 First, each shared

housing unit must provide its guests with soap, clean individual bath cloths

and towels, and clean linen.96 All of these must be kept in good repair and

must be changed between guests.97 Additionally, the host is required to clean

and sanitize all dishes, utensils, pots, pans, and other cooking utensils

between guests.98 Any leftover food, beverages, and alcohol left by the

previous guests must also be disposed of.99 If the host provides food to any

guests, the host is required to comply with all applicable food handling and

licensing requirements of the Chicago Municipal Code and the Board of

Health regulations.100

Additionally, Chicago requires that each host ensure that the shared

housing unit is in compliance with applicable laws regarding the installation

and the maintenance of functioning smoke and carbon monoxide detectors.101

An evacuation diagram identifying all means of egress from the shared

housing unit and the building is required to be posted in a conspicuous place

near the entrance of the shared housing unit.102

Another important aspect of health and safety is the listing itself.

Chicago requires descriptive information on the listing.103 First, the listing

must state the short-term residential rental provider’s cancellation and check-

in and check-out policies.104 Second, it must provide a statement on whether

93. See CHI., ILL., MUN. CODE § 4-14-040 (2018), https://perma.cc/9GFX-BRMF.

94. § 4-14-040.

95. § 4-14-040.

96. § 4-14-040(a)(1).

97. § 4-14-040(b)(1).

98. § 4-14-040(b)(2).

99. § 4-14-040(b)(2).

100. § 4-14-040(b)(7).

101. § 4-14-040(b)(5).

102. § 4-14-040(b)(6).

103. § 4-14-040(a).

104. § 4-14-040(a)(1).


or not the rental is wheelchair or ADA accessible.105 In addition to this, it

must state whether there is any parking and what restrictions there are, as

well as the availability of any recreational facilities or other amenities.106

Third, there must be a description of the unit, specifying the number of

sleeping rooms, the number of bathrooms, and what portion of the house is

available to rent.107 Finally, it must provide the short-term residential rental

provider’s city license or registration number.108 This registration process

will be discussed more in depth in the third part of this section related to

permitting.

Hotels additionally have the added benefit of having a contact person

or manager within the building. In Chicago, each shared housing host is

required to post in a conspicuous place near the entrance the name and

telephone number of a local contact person.109 This “local contact person” is

defined as “a person authorized as an agent of the shared housing host who:

(1) is designated for service of process; (2) is authorized by the shared

housing host to take remedial action and to respond to any violation of this

Code; and (3) maintains a residence or office located in the city.”110

Boulder, Colorado increases this local contact requirement and

requires the name and telephone number of two local contacts on the

application form.111 These local contacts must be “capable of responding to

the property within sixty minutes.”112 However, the other safety restrictions

are much more relaxed, only requiring a “certification that the dwelling unit

is equipped with operational smoke detectors, carbon monoxide detectors

and other life safety equipment as may be required by the city manager.”113

San Francisco, California’s requirements are less specific than

Chicago’s.114 The only specific requirement in the code in terms of health

and safety is just that the residence needs to demonstrate the property is not

“subject to any outstanding Building, Electrical, Plumbing, Mechanical, Fire,

Health, Housing, Police, or Planning Code enforcement.”115 However,

similar to Chicago, the owner must post a “clearly printed sign” providing

information regarding the “location of all fire extinguishers in the unit and

building, gas shut off valves, fire exits, and pull fire alarms.”116

105. § 4-14-040(a)(2(i).

106. § 4-14-040(a)(2)(ii-iii).

107. § 4-14-040(a)(3).

108. § 4-14-040(a)(4).

109. § 4-14-040(b)(6).

110. § 4-14-010.

111. BOULDER, COLO., MUN. CODE § 10-3-19(c)(5) (2018), https://perma.cc/4P9F-

X66Q.

112. § 10-3-19(c)(5).

113. § 10-3-19(c)(4).

114. S.F., CAL., ADMIN. CODE § 41A.5(H) (2018), https://perma.cc/QV98-NAWG.

115. § 41A.5(H)

116. § 41A.5(2)(D).


While the codes in Chicago and San Francisco are directly in

response to the rise in short-term rentals, some other spots such as Douglas

County, Nevada, home of Lake Tahoe, have had ordinances related to

vacation rentals for a longer time.117 However, it is easy to see many of the

similarities in the codes. In Douglas County, the vacation home rental must

have a clearly visible and legible notice posted within the unit on or adjacent

to the front door which contains health and safety information.118

This notice first has to contain the name of the agent, local contact

person, or owner of the unit with a telephone number at which that party may

be reached on a 24-hour basis.119 The definition of local contact person is

similar to Chicago.120 However, it is worth noting that while Chicago requires

this local contact person’s information to be available, Douglas County lists

three different options with the only stipulation being that any of those parties

must be reachable on a 24-hour basis.121

Furthermore, this notice must list the maximum number of occupants

permitted to stay in the unit, the maximum number of vehicles allowed to be

parked on the property, and the location of on-site and assigned parking

spaces.122 Something that Douglas County requires that Chicago does not is

information regarding the trash pick-up day and notification that the trash

may not be stored on the exterior of the property except for certain times.123

Some cities, such as San Francisco, require the hosts to carry some

kind of liability insurance.124 While this issue is somewhat alleviated for

Airbnb hosts by the company’s Host Protection Insurance program, which

can cover up to $1 million per occurrence of third party claims of bodily

injury or property, Airbnb’s insurance program does not cover intentional

acts, loss of earnings, fungi or bacteria, as well as other exclusions.125

However, it is worth noting that not all short-term hosting platforms provide

liability insurance coverage, so the issue is still relevant in drafting an

ordinance to the extent that some owners may still need to get coverage.126

117. See generally Amy Alonzo, Doulas County vacation rental ordinance to see

updates, THE RECORD-COURIER (Mar. 23, 2017), https://perma.cc/4T8Z-BKDH (pointing out

that the last update to the code occurred in 2005).

118. DOUGLAS CTY, NEV. CODE § 5.40.090 (2018), https://perma.cc/3TGV-SK98.

119. § 5.40.090.

120. § 5.40.100.

121. § 5.40.090.

122. § 5.40.090.

123. § 5.40.090.

124. S.F., Cal., Admin. Code § 41A.5(g)(1)(D) (2018), https://perma.cc/4DM6-BTRD.

125. What is Host Protection Insurance?, AIRBNB, https://perma.cc/TL4E-C59U (last

visited Jan. 28, 2018).

126. Stephen Fishman, Understand insurance and liability issues when you rent out

your home on Airbnb, NOLO, https://perma.cc/SD54-7Y3N (last visited Jan. 28, 2018)

(“Instead, HomeAway recommends that hosts obtain their own short-term rental coverage

from the insurer[.]”).


B. Zoning

Another issue that is prominent in short-term rental regulation is

which zones permit these short-term rentals. It is valuable in the case of

zoning to start with broader zoning regulations and move to progressively

more narrow zoning regulations. Portland, Oregon has one of the broadest.127

Portland allows short-term rentals in all zones.128 However, in zones where

Retail Sales and Service uses are allowed, these short-term rentals may be

regulated as either Retail Sales and Service uses or as short-term rentals.129

“This decision is up to the applicant.”130

Chicago adds the idea of “restricted residential zones.”131 A

restricted residential zone is defined as:

a precinct within which, in any combination: (1) all new or

additional shared housing units or vacation rentals, or both,

have been ordained as ineligible for licensing or registration

under Chapter 4-14 [“Shared Housing Units”] or Section 4-

6-300 [“Vacation Rentals”] of this Code; or (2) all new or

additional shared housing units or vacation rentals, or both,

that are not their owner’s primary residence have been

ordained as ineligible for licensing or registration under

Chapter 4-14 or Section 4-6-300 of this Code.132

The legal voters of any precincts that contain residentially zoned

property may petition their local alderman to introduce an ordinance to

prohibit all new or additional shared housing units, vacation rentals, or

both.133 The ordinance can be a general ban, or it can ban only those units

that are not their owner’s primary residence.134

This petition requires the signatures of at least 25% of the registered

voters of the precinct.135 The alderman must assess relevant factors, which

include the precinct’s geography, density and character, the prevalence of

residentially-zoned property, current shared housing units and vacation

rentals in the precinct, and the prevailing viewpoint with regard to the issue

raised in the petition.136 Once these factors have been assessed, the alderman

127. CITY OF PORTLAND, OR., PLANNING AND ZONING CODE § 33.207.030 (2018),

https://perma.cc/RZP6-6LU7.

128. § 33.207.030.

129. § 33.207.030.

130. § 33.207.030.

131. CHI., ILL., MUN. CODE § 4-17-010 (2018), https://perma.cc/LRP2-QUZ5.

132. § 4-17-010.

133. § 4-17-020.

134. § 4-17-020.

135. § 4-17-020.

136. § 4-17-020.


may introduce an ordinance which creates a restricted residential zone in that

precinct.137

Charleston, South Carolina allows for short-term rentals in various

zones and provides an overlay map to help potential owners know whether

or not they live in an area that allows for short-term rentals.138 While

Charleston is in the process of conducting an evaluation of potential changes

in regard to their short-term rental property ordinance, as it stands, the City

of Charleston Department of Planning, Preservation & Sustainability

provides a Short-term Rental Overlay map that shows which properties are

eligible for short-term rentals.139 The Short-term Overlay Zone in the

ordinance allows for short-term rentals as conditional uses in certain zone

districts as long as the “use satisfies” various conditions.140 These include not

being an affordable housing unit, a prohibition on exterior signs, and

compliance with all business license and revenue collection laws of the City

of Charleston.141

One interesting aspect of Charleston’s zoning ordinance as it relates

to short-term rentals is the number of units permitted on one lot.142 Whereas

some ordinances such as St. Helena, California only allow for one short-term

rental unit per lot,143 Charleston allows for “[n]o more than nine (9) short-

term rental units . . . on one (1) lot.”144 Additionally, the ordinance provides

that for ten or more an accommodations use is possible.145 This

accommodation makes it so renters in apartment buildings could potentially

rent out their apartments as short-term rental units.

Finally, Miami, Florida has a much stricter zoning definition. In a

memorandum from the City of Miami Planning & Zoning Department Office

of Zoning, the definitions of residential areas in the zoning code are

interpreted.146 Under this interpretation, “using a Single Family residence or

Two Family-Housing (a duplex) within a T3 [residentially zoned area] to

provide rental accommodations per night, week or anything less than one

137. § 4-17-020.

138. CHARLESTON, S.C., ZONING CODE § 54-227(a) (2018), https://perma.cc/UQ4C-

XGYZ.

139. Short Term Rental Task Force, CITY OF CHARLESTON, S.C,

https://perma.cc/A4EV-YBZ7 (last visited Jan. 28, 2018); Short Term Rental, ST Overlay,

CITY OF CHARLESTON, S.C., https://perma.cc/JM7V-DH7K (last visited Jan. 28, 2018).

140. § 54-227(a) (“Short term rentals may be permitted in the CT, LB, GB, UC, MU-1,

MU-1/WH, MU-2, and the MU-2/WH zone districts within the Short Term Rental, ST

Overlay Zone as a conditional use if the use satisfies, as evidenced by an application, a site

plan and floor plans of the property. . . . “).

141. § 54-227(a).

142. § 54-227(a).

143. ST. HELENA, Cal., MUN. CODES § 17.134.040(A) (2018), https://perma.cc/H4JP-

JQL2.

144. § 54-227(a) (2018), https://perma.cc/4768-H43Z.

145. § 54-227(a).

146. Chabeli Herrera, Miami puts plan for strict short-term rental rules on hold – for

now, MIAMI HERALD (Feb. 28, 2017), https://perma.cc/3XTQ-BCU6.


month would constitute an activity in violation of Miami Ordinance 21.”147

This interpretation essentially outlaws short-term rentals in suburban

areas.148

C. Permitting

The majority of cities regulating short-term rental properties now

require that the host acquire some sort of license or permit in order to

operate.149 This helps the cities monitor who is renting the properties, where

they are renting, and whether or not hosts are keeping up with the health and

safety regulations.150 However, monitoring these permits is a difficult task,

which will be addressed below in Section III(E), regarding problems with

enforceability.151 Some cities, such as Philadelphia, Pennsylvania require no

permit as long as the residence is rented 90 days or less in a calendar year.152

However, many cities that have sought to regulate short-term rental

properties do require permitting.153 Santa Fe, New Mexico shows some of

the standard requirements cities utilize in applications for short-term rental

permits.154 First, an application to get a permit for a residential unit requires

proof of ownership of the unit.155 This can be shown with a deed or the latest

property tax record.156 Additionally, an owner must submit a site plan with a

scale showing of all buildings and parking.157 The owner must have a floor

plan to scale showing all bedrooms.158 Furthermore, the owner must have

147. Letter from Irene S. Hegedus, Zoning Administrator, City of Miami Planning &

Zoning Department, to Francisco J. Garcia, Dir. of Planning and Zoning, City of Miami

(Aug. 11, 2015), https://perma.cc/P8CN-VTV2.

148. Herrera, supra note 146.

149. See CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE § 14-6-2(A)(5)(b)(ii)

(2018), https://perma.cc/7XTZ-5GWM; NASHVILLE, TENN., SUB. ORDINANCE NO. BL2014-

951 (Feb. 26, 2015), https://perma.cc/65PB-9225.

150. See generally Short Term Rental Property, METRO. GOV’T OF NASHVILLE &

DAVIDSON CTY., TENN., https://perma.cc/5RFL-DU2Y (last visited Jan. 28, 2018)

(discussing the permitting requirements and process in Nashville).

151. See generally HOST COMPLIANCE, https://perma.cc/XM9J-DYXH (last visited Jan.

28, 2018) (discussing the difficulty cities face regulating short-term rentals).

152. Short Term Home Rental, LICENSES + INSPECTIONS, CITY OF PHILA.,

https://perma.cc/87JK-QT6L (last visited Jan. 28, 2018).

153. See generally Short-Term Rentals Regulation in 10 US Cities, BNB SHIELD,

https://perma.cc/QR9H-XRP3 (last visited Aug. 17, 2018) (showing multiple major cities

require permitting).

154. CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE § 14-6-2 (2018),

https://perma.cc/VE6S-N32P.

155. § 14-6-2.

156. Short Term Rental Permit Application, CITY OF SANTA FE, https://perma.cc/3M29-

Q4SB (last visited Jan. 28, 2018).

157. Id.

158. Id.


proof of property insurance.159 There must also be proof that the short-term

rental unit has had all required inspections.160

This application also must have the name and number of the owner

or operator where he or she is available twenty-four hours a day, seven days

a week in order to respond to any complaints.161 The application must be

signed by the owner, indicating that he or she will operate the short-term

rental unit in compliance with any applicable laws.162 This application is

submitted with a $100 nonrefundable fee.163 Once all the required inspections

have been approved, an owner will be notified that the unit is eligible for a

short-term rental permit.164

While different cities have different renewal procedures, Santa Fe

requires a yearly renewal.165 This renewal process starts with a notification

in December that renewal is required.166 The permit holder then has until

March 15 to submit a renewal application and payment.167 Under this

method, the owner makes yearly payments to keep the permit active and

continue operating a short-term rental.168

Some cities have different permitting requirements depending on

whether a property is owner-occupied or non-owner-occupied.169 Owner-

occupied requires that “the owner of the property permanently resides in the

[short-term rental property] or in the principal residential unit with which the

[short-term rental property] is associated on the same lot.”170 Nashville,

Tennessee originally allowed non-owner-occupied short-term rental

properties but would only grant permits in three percent of the single-family

or two-family residential units within each census tract.171 However,

Nashville subsequently passed a new ordinance that seeks to phase out all

non-owner-occupied short-term rental properties by June of 2020.172

159. Id.

160. CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE § 14-6-2(A)(5)(d)(iii)

(2018), https://perma.cc/59WU-9DRZ.

161. § 14-6-2(A)(5)(d)(i).

162. § 14-6-2(A)(5)(d)(ii).

163. § 14-6-2(A)(5)(d)(vii).

164. Short Term Rental Permit Application, supra note 156.

165. Id.

166. Id.

167. Id.

168. Id.


https://perma.cc/XBY5-VALH; METRO. GOV’T OF NASHVILLE, Short Term Rental Property

Permit Information, NASHVILLE.GOV (last visited Aug. 19, 2018), https://perma.cc/WUR8-

DU53.

170. Id.

171. Id.

172. Joey Garrison, Nashville’s short-term rental vote: What it does, doesn’t do, and

why it’s a big deal, TENNESSEAN (Jan. 25, 2018), https://perma.cc/Z5SF-M7TK.


This is similar to what New York City already required, prohibiting

short-term rentals unless they are in an owner-occupied unit.173 Under New

York’s Multiple Dwelling Law, there are two types of dwellings.174 Class A

dwellings are residential buildings that are occupied for 30 days or more, and

Class B dwellings are buildings that are occupied for less than 30 days.175

This law was amended to provide that Class A dwellings must have the same

person or family rent for at least 30 consecutive days.176 The amendment

prevents landlords from taking advantage of the price disparity between

people renting long-term and the amount of money that can be generated by

a short-term vacation rental.177

Under this law, a person can only rent to a guest if the owner also

occupies the dwelling.178 While this law was not specifically targeting online

short-term rentals, this law as applied to short-term rentals makes it illegal in

New York to rent non-owner occupied short-term rental properties.179

Moreover, not only must the host be on the premises, but the guest must also

have access to the entire unit.180

Another issue in permitting, besides just the application for the

different types of permits, is the requirement of notice. Portland, Oregon

requires the owner of the short-term rental to notify the neighborhood

association and the District Coalition of Neighborhoods.181 Additionally, the

owner must notify all property owners with properties abutting and directly

and diagonally across from their residence.182 This is a simple notice

requirement, and the neighbors are not required to sign or send back anything

specifying that they have received this notice.183 Portland provides a sample

letter that can be filled out and sent to neighbors.184

173. David Pfeffer, The Conundrum With Short-Term Rentals in NYC, LAW 360 (Feb.

6, 2017), https://perma.cc/Z7Q8-KGHG.

174. N.Y. STATE, MULTIPLE DWELLING LAW § 194 (McKinney 2018).

175. N.Y. STATE, MULTIPLE DWELLING LAW §§ 4(8)(a)(1)(A), 4(9).

176. § 4(8)(a)(1)(A).

177. Pfeffer, supra note 173.

178. Id.

179. Id.

180. To Airbnb or not to Airbnb: New York’s Restrictions on Short-term Rentals,

ROSEN LAW LLC (Oct. 10, 2017), https://perma.cc/JHM6-3HHP.

181. CITY OF PORTLAND, OR., PLANNING AND ZONING CODE § 33.207(C) (2018),

https://perma.cc/F3BB-AFA6; see CITY OF PORTLAND OR., Neighborhood Notice Accessory

Short-Term Rental Permit – 1&2 Dwelling Structure, BUREAU OF DEV. SERVS. (last visited

Aug. 19, 2018), https://perma.cc/RQ5C-PRHT.

182. § 33.207(C).

183. § 33.207(C).

184. Neighborhood Notice, CITY OF PORTLAND, https://perma.cc/RQ5C-PRHT (last

visited Jan. 28, 2018).


D. Taxation

Hotels are generally required to pay transient occupancy taxes,

which are charged to travelers when they stay in accommodations for fewer

than thirty days.185 But what about people who instead stay in short-term

rental properties? Airbnb provides on its website information about

occupancy taxes for travelers.186 According to the help page, Airbnb

“expect[s] all hosts to familiarize themselves with and follow their local laws

and regulations.”187 At the bottom of the page, Airbnb states that “[it will] let

you know if an occupancy tax related feature becomes available for your

listing.”188

While allowing Airbnb to collect and remit taxes to cities may seem

like a win-win for both hosts and cities, there is more to this issue than meets

the eye.189 Many cities are worried about allowing Airbnb to collect and remit

the taxes without certain concessions to the city, such as the addresses of

where the taxes are being remitted from.190 However, a recent report which

was prepared with support from the American Hotel and Lodging

Association says that some cities are willing to make these concessions.191

Even though the hotel industry is an obvious critic of Airbnb because of

Airbnb’s growing share of the market, the report does point out some unusual

concessions on the part of tax agencies.192

One of the biggest concessions is that these agreements do not

“guarantee accountability for the proper payment of lodging taxes because

tax agencies cede a substantial control of the payment and audit processes to

Airbnb.”193 Airbnb does not share direct data about either hosts or listings,

making it more difficult for city officials to police residents breaking short-

term rental local laws.194 Why might a city be willing to concede such an

important aspect of tax collection?


https://perma.cc/DTU8-CM5R.

186. What is occupancy tax? Do I need to collect or pay it?, AIRBNB,

https://perma.cc/XC2F-HRAD (last visited Jan. 28, 2018).

187. Id.

188. Id.

189. See Alison Griswold, Why Airbnb Desperately Wants to Pay Hotel Taxes, SLATE

(Feb. 13, 2015), https://perma.cc/C5BP-MYJT; Roberts, supra note 68.

190. Griswold, supra note 189 (“[I]t would effectively sanction an operation that local

regulations make largely unlawful”); Kokalitcheva, supra note 87 (“[m]any municipalities

across the U.S. have criticized Airbnb for the opacity of its hosts’ activities through the

service, often violating local regulations on short-term rentals”).

191. DAN R. BUCKS, AIRBNB AGREEMENTS WITH STATE AND LOCAL TAX AGENCIES 2-3

(2017), https://perma.cc/293F-JVRE.

192. Roberts, supra note 68 (“[f]or instance, the deals do not permit the cities to audit

Airbnb’s books or identify the addresses of the hosts”).

193. Bucks, supra note 191, at 2.

194. Kokalitcheva, supra note 87.


For example, in Lexington, Kentucky, 2016 data showed that

tourism officials could get an additional estimated $150,000 in revenue from

Airbnb each year.195 The company itself estimated that through partnering

with the fifty largest American cities, the company could have provided $200

million in tax revenue in 2015.196 However, according to the author of the

report, these cities should be cautious not to undermine the democratic

process and “provide special treatment to Airbnb.”197

There are other taxes, such as sales tax, that can be collected in regard

to short-term rentals but, according to a 2017 Survey of State Tax

Departments, there is a split on who should be responsible for these taxes.198

Fifteen states impose tax collection obligations on Airbnb.199 Twenty-five

states put the responsibility of collecting sales tax on the property owner.200

Some states make the property owner and the company jointly liable.201 Some

states take an entirely different approach, such as New Jersey, which requires

no remittance of taxes.202 A bill was recently vetoed by the governor that

would have imposed taxes on Airbnb rentals, despite having support from

both the hotel industry and Airbnb itself.203

E. Enforceability

Despite a great deal of passed and proposed regulations in cities and

municipalities, these regulations mean nothing if they are not enforceable.204

The difficulty of enforcing any regulations, along with previous lengthy

battles with other sharing economy companies such as Uber, have led some

cities to not even attempt to regulate short-term rentals.205

195. Beth Musgrave, Lexington Airbnb hosts made $1.8 million in 2016. Now the city

will get its cut., LEXINGTON HERALD LEADER (Dec. 5, 2017), https://perma.cc/L4CH-7GSR.

196. Kokalitcheva, supra note 87.

197. Roberts, supra note 68 (“Bucks said cash-strapped cities often agree to

concessions because Airbnb offers a carrot in the form of a big check, and because they lack

the resources to conduct long-running investigations into the company and its software”).

198. Gerald B. Silverman, Airbnb Free of New Jersey Sales, Hotel Tax, BLOOMBERG

BNA (Jul. 21, 2017), https://perma.cc/Z6RJ-2WUG. See also 2017 Survey of State Tax

Department, BLOOMBERG BNA (2017), https://perma.cc/6CYK-UNEE.

199. 2017 Survey of State Tax Department, BLOOMBERG BNA S-6 (2017),

https://perma.cc/ZP8T-ZZAT.

200. Id.

201. Id. (“Several states, including Colorado, Iowa and North Carolina, noted that the

owner and third party are jointly liable for the collection of sales tax.”).

202. Silverman, supra note 198.

203. Id. (“‘We are extremely disappointed the governor decided to veto a bill that

would have generated millions of dollars for Garden State residents without raising taxes,’

Airbnb said in a statement.”)

204. See Christine Van Geyn, Slapping new regulations on Airbnb won’t cure cities’

housing woes, CBC NEWS (July 10, 2017), https://perma.cc/XA4H-63PW.

205. See Mark Reagan, No Rules: Will San Antonio Regulate Airbnb and Homeaway?,

SAN ANTONIO CURRENT (Feb. 18, 2015), https://perma.cc/9T7Y-X8U5 (“San Antonio is still

smarting over the city’s bitter fight against popular ride-sharing services Uber and Lyft.”).


Some cities attempt to make violating the law frightening to a home-

owner by levying fines for non-compliance that would deter most

homeowners from violating the law.206 Miami takes this idea to the extreme,

imposing fines for short-term rental violations that are up to twenty times

higher than the maximum fine for a first-time drunk driving conviction.207

The city’s $20,000 fine only increases with multiple violations, reaching a

total of $100,000 for a fifth violation.208

Miami has the most extreme penalties for short-term rental violations

in the United States.209 However, some cities with lower fines, such as

Portland, Oregon, are increasing their fines to make renting without a permit

less appealing.210 Nashville, Tennessee imposes a fifty dollar fine per day for

each day of operation without a permit.211 These fines add up, resulting in a

$10,500 fine for a Nashville resident who continued to operate a short-term

rental after the Board of Zoning Appeals had suspended his permit.212

Another perhaps more pressing issue is who is going to enforce these

restrictions. San Francisco has created an entire Office of Short-Term

Rentals.213 But other cities, such as Asheville, North Carolina, have only

hired a single employee.214 This employee is responsible for processing

applications, issuing permits, and issuing notices of violations and

citations.215 Santa Monica, California falls in between, hiring two code

enforcement officers and a data analyst.216 These analysts are hired from

revenue collected from home-sharing tax.217

This difficulty in monitoring and enforcing short-term rental

properties has even led to start-up companies forming to take over these

206. See John Kartch, $20,000: Miami Beach Short-Term Rental Fines Are USA’s

Highest, FORBES (Oct. 26, 2017), https://perma.cc/P9EL-HKXW.

207. Id. (“Violations of this city’s restrictive short-term rental law can result in fines of

$20,000 or more . . . In Florida the maximum fine for a first-time drunk driving conviction is

$1,000.”).

208. Id.

209. Id.

210. Portland to raise fines for operating Airbnb rental without permit, KGW8 NEWS

(FEB. 16, 2017), https://perma.cc/H8WQ-NDMH (“Currently, fines for operating without a

permit . . . range from roughly $700 to $1,400. [L]ate next month, the city will raise fines to

between $1,000 and $5,000.”).


https://perma.cc/98DZ-5Q5P.

212. Kevin Trager, Judge issues $10,500 fine for Airbnb host, man rents home anyway,

WSMV (Nov. 16, 2017), https://perma.cc/UR4K-6VHP.

213. S.F. OFFICE OF SHORT-TERM RENTALS, https://perma.cc/DGU8-TAW3 (last visited

Jan. 28, 2018).

214. Asheville’s homestay and short-term rental regulation program progressing,

ASHEVILLE CITY SOURCE (July 13, 2016), https://perma.cc/6K73-62VN.

215. Id.

216. Logan, supra note 92.

217. Id.


responsibilities.218 On their homepage, Host Compliance announces that the

company “makes it easy for municipalities to implement and enforce fair and

effective short-term rental rules.”219 Around 110 cities are listed as using the

services of Host Compliance.220 The fact that other start-up companies are

emerging to help regulate Airbnb, a start-up company itself, shows how

difficult to regulate some of these problems have become.

IV: LEGAL ISSUES

Regulating these short-term rental properties without violating

existing law is difficult, and some of these regulations are already being

challenged in court.221 In various courts across the United States, short-term

rental property challenges have been raised on grounds such as anti-

monopoly concerns, contractual issues, freedom of speech violations,

ambiguity, and vagueness.222

A. Anti-Monopoly

Nashville, Tennessee passed an ordinance providing that no more

than three percent of non-owner occupied single-family or two-family

residential units would be granted short-term rental permits in each census

tract.223 The Anderson family challenged this for, among other things,

violating the anti-monopoly clause of the Tennessee State Constitution.224

Article I, Section 22 states that “perpetuities and monopolies are contrary to

the genius of a free state, and shall not be allowed.”225 This provision is

similar to other states’ constitutions related to monopolies.226

In Anderson v. Metropolitan Government of Nashville & Davidson

County, the Andersons moved from Chicago to Nashville and obtained an

owner-occupied permit.227 Upon receiving a promotion that required moving,

218. Heather Kelly, Meet the Airbnb police, CNN TECH (Oct. 1, 2016),

https://perma.cc/E95F-YFVW.

219. HOST COMPLIANCE, https://perma.cc/S6WQ-VFL5 (last visited Jan. 28, 2018).

220. Id.

221. See Dunn v. Aamodt, 695 F.3d 797 (8th Cir. 2012); La Park La Brea A LLC v.

Airbnb, Inc., 285 F. Supp. 3d 1097 (C.D. Cal. 2017); Airbnb, Inc. v. City & Cty. of S.F., 217

F. Supp. 3d 1066 (N.D. Cal. 2016); Vera Lee Angel Revocable Tr. v. Jim O’Bryant & Kay

O’Bryant Joint Revocable Tr., 537 S.W.3d 254 (Ark. 2018); Anderson v. Metro. Gov’t of

Nashville & Davidson Cty., No. M201700190COAR3CV, 2018 WL 527104 (Tenn. Ct. App.

Jan. 23, 2018).

222. Id.

223. Anderson, 2018 WL 527104, at *2.

224. Id. at *2-3

225. Id. at *17 (citing TENN. CONST. art I, § 22).

226. N.C. CONST. art. I, § 34 (“Perpetuities and monopolies are contrary to the genius of

a free state and shall not be allowed.”); TEX. CONST. art. 1, § 26 (“Perpetuities and

monopolies are contrary to the genius of a free government, and shall never be allowed. . . .

“).

227. Anderson, 2018 WL 527104, at *2.


the Andersons kept the Nashville residence and applied for a non-owner-

occupied permit.228 This application was denied because the three percent cap

had already been reached in the Andersons’ census tract.229

The Andersons challenged the Nashville ordinance, claiming among

other things that it provided an unlawful monopoly to those existing three

percent of owners.230 The Andersons further contended that the cap had “no

legitimate relation to any valid public purpose.”231 The trial court found that

the three percent cap did not constitute granting of a monopoly, and even if

it did the cap would still be permissible.232 In deciding this, the trial court

emphasized that the granting of a monopoly is not prohibited if such a

monopoly “has a reasonable tendency to aid in the promotion of the health,

safety, morals and well-being of the people.”233

The Tennessee Court of Appeals decided that the three percent cap

was a granting of a monopoly, but that this determination was not dispositive

in answering whether the cap was invalid under the Tennessee

Constitution.234 The court believed that the protection of residential character

implicated the public’s well-being, even to the extent that such protection

might be considered to partially promote aesthetic considerations.235 The

court recognized the residential concerns of allowing unlimited non-owner-

occupied short-term rentals in any particular neighborhood.236 Apparently, in

the neighborhood in question, 20% of the homes were non-owner occupied

short-term rentals.237 Nashville passed a new ordinance on the same day the

Anderson opinion was issued by the Tennessee Court of Appeals, which

plans to phase out non-owner-occupied short-term rental properties by

2020.238

B. Contractual Issues

Many homeowners’ associations (“HOAs”) and lease agreements

have provisions that restrict the renters or home owners from renting out their

homes on Airbnb, but that raises the question of whether Airbnb has any

228. Id. at *3.

229. Id.

230. Id.

231. Id.

232. Id. at *8.

233. Id. at *6 (citing Checker Cab Co. v. City of Johnson City, 216 S.W.2d 335, 337

(Tenn. 1948)).

234. Id. at *8.

235. Id. at *10.

236. Id. at *9 (“The reason we want limits on the non-owner-occupied houses on our

street is the same reason you don’t want to live in a hotel. There is an increased number [of]

transient strangers, and there is [a] decreased sense of community. [M]y children’s friends

have been replaced by bachelorette parties.”).

237. Id.

238. Id. at *1; Garrison, supra note 172.


responsibility to monitor or report users that do.239 Airbnb has created a

“Friendly Buildings Program” as a way for landlords, property managers, and

HOAs to let people in their building host short-term rentals.240 By

participating, landlords, residents, and HOAs share portions of the

reservation income, and Airbnb helps create specific hosting rules.241 Despite

this, Airbnb has still been sued multiple times by groups alleging that, by

publishing the properties available for rent, Airbnb is responsible for

monitoring and policing these agreements and, consequently, would fall

outside of the Section 230 immunity of the Communication Decency Act

(“CDA”).242

Section 230 of the CDA states that “[n]o provider or user of an

interactive computer service shall be treated as the publisher or speaker of

any information provided by another information content provider.”243 An

“information content provider” is defined as “any person or entity that is

responsible, in whole or in part, for the creation or development of

information provided through Internet or any other interactive computer

service.”244

This issue came up in Airbnb v. San Francisco, where Airbnb

challenged San Francisco’s then existing ordinance, which made it a

misdemeanor to collect a fee for providing booking services for the rental of

an unregistered unit within the city.245 Airbnb argued that the ordinance was

preempted by Section 230 of the CDA, and that the ordinance would require

it to monitor and police listings by third parties.246

The district court rejected this argument, stating that the ordinance

did not create any obligation on Airbnb to monitor, edit, withdraw, or block

the content supplied by hosts.247 San Francisco apparently even emphasized

in its briefs and at oral argument that “[Airbnb is] perfectly free to publish

any listing [it gets] from a host and to collect fees for doing so—whether the

unit is lawfully registered or not—without threat of prosecution or penalty

under the Ordinance.”248

239. See Edvard Pettersson, Airbnb Defeats Aimco Lawsuit Over Unauthorized

Subleases, BLOOMBERG TECHNOLOGY (Jan. 2, 2018), https://perma.cc/FZN7-U9QX.

240. What’s the Airbnb Friendly Buildings Program?, AIRBNB, https://perma.cc/8JHQ-

FQME (last visited Jan. 28, 2018).

241. Id.

242. La Park La Brea A LLC v. Airbnb, Inc., 285 F. Supp. 3d 1097, 1102-04 (C.D. Cal.

2017); Donaher v. Vannini, No. CV-16-0213, 2017 WL 4518378, at *3 (Me. Super. Ct. Aug.

18, 2017).

243. 47 U.S.C. § 230(c)(1) (2017).

244. 47 U.S.C. § 230(f)(3) (2017).

245. Airbnb, Inc. v. City and Cty. of S.F., 217 F. Supp. 3d 1066, 1071 (N.D. Cal.

2016).

246. Id. at 1072.

247. Id.

248. Id. at 1073.


This came up again more recently in La Park La Brea v. Airbnb.249

Here, the plaintiffs, Aimco, were owners and operators of apartment

buildings in Los Angeles, California.250 The lease agreements contained an

anti-subleasing clause, providing that the “[r]esident shall not sublet the

Apartment or assign this Lease for any length of time, including . . . renting

out the Apartment using a short-term rental service such as [Airbnb].”251

Aimco contacted Airbnb to obtain information about how it could prevent

unlawful subleasing, received information about the Friendly Buildings

Program, and provided Airbnb the lease agreements.252 Airbnb then advised

Aimco that it does not review lease agreements or mediate disputes between

hosts and property owners regarding leases.253

Aimco argued that Airbnb was an information content provider as

opposed to being immune under the CDA Section 230.254 However, the

district court rejected this argument.255 Despite requiring hosts to include

specific information about the property and themselves, collecting payments

and commissions, and offering ancillary services, the court determined that

Airbnb was not an information content provider.256 As the court stated,

“Airbnb hosts—not Airbnb—are responsible for providing the actual listing

information[,]” and Airbnb is merely providing a framework which can be

utilized both properly and improperly.257 This case cited at length Donaher

v. Vinnini, a Maine state court case, which held that merely processing

payments does not strip a provider of immunity under the CDA.258

While this decision once again holds that a suit against Airbnb for

violation of lease agreements is unlikely to be successful based on CDA

Section 230, Aimco has appealed this case to the Ninth Circuit Court of

Appeals.259 However, as the court pointed out, the Ninth Circuit analyzes

whether or not a content provider is the creator of challenged content by

determining if the provider merely encouraged the creation of the content or

if it instead actually required another to create the content.260 As discussed in

249. La Park La Brea A LLC v. Airbnb, Inc., 285 F. Supp. 3d 1097, 1099-1100 (C.D.

Cal. 2017).

250. Id. at 1100.

251. Id.

252. Id. at 1101.

253. Id.

254. Id. at 1103.

255. Id. at 1104.

256. Id.

257. Id. at 1105.

258. Id. at 1104 (citing Donaher v. Vannini, No. CV-16-0213, 2017 WL 4518378, at*

3-4 (Me. Super. Ct. Aug. 18, 2017) (“The Maine state court held that ‘the processing or

receipt of payments associated with posts does not strip a provider or user of an interactive

computer service of immunity under the CDA’ and granted Airbnb’s motion to dismiss”)).

259. Dennis Lych, Aimco appeals court case against Airbnb over LA apartment rentals,

THE REAL DEAL (Jan. 26, 2018), https://perma.cc/573A-H5VD.

260. See Fair Hou. Council of San Fernando Valley v. Roommates.com LLC, 521 F.3d

1157, 1171 (9th Cir. 2008).


Section I, the evolving model of the sharing economy might provide an

interesting analysis of this issue, but that is a lengthy discussion beyond the

scope of this note.261

C. Freedom of Speech

Between the Anderson trial court opinion and the Anderson decision

being released by the Court of Appeals, Nashville amended the zoning code

as it related to free speech and signage.262 However, when the case was at the

trial level, Nashville’s zoning code still prevented homeowners from

advertising their property as a short-term rental without first obtaining a

permit.263 Additionally, even once a permit was obtained, homeowners were

not allowed to display signs or other advertising on the property that

indicated the unit was being utilized as a short-term rental property.264 The

Andersons argued that this abridged their free speech rights.265

As previously mentioned, between the trial court decision and the

court of appeals decision, Nashville amended the ordinance.266 This

amendment altered the advertising ban to provide that “[a]ny sign . . . on a

property used as a short-term rental property shall be governed by the

provisions of [Metro Code] Sign Regulations.”267 The trial court, upon

motion from the City of Nashville, entered an agreed order dismissing the

Andersons’ free speech claim as moot.268 While this issue was therefore not

addressed at the appellate court level, the court of appeals did note that the

trial court believed there was a substantial likelihood of success with respect

to the free speech claim.269

Furthermore, based on the Supreme Court’s decision in Reed v. Town

of Gilbert, “[g]overnment regulation of speech is content based if a law

applies to particular speech because of the topic discussed or the idea or

message expressed.”270 The Court went on to state that a content based law

is subject to strict scrutiny “regardless of the government’s benign motive,

261. See generally Sundarajan, supra note 27 (discussing the sharing economy at

length).

262. Anderson v. Metro. Gov’t of Nashville & Davidson Cty., No.

M201700190COAR3CV, 2018 WL 527104, at *5 (Tenn. Ct. App. Jan. 23, 2018).

263. Id. at *1.

264. Id.

265. Id. (The parties cited both Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015) and Los

Angeles v. Patel, 135 S. Ct. 2443 (2015).).

266. Id. (“In 2016, however, Metro took steps to amend the ordinances related to the

Andersons’ free speech . . . claim [], citing both Reed and Patel as a basis for its action.”).

267. Id. at *3.

268. Id.

269. Id. at *14.

270. Reed, 135 S. Ct. at 2226 (quoting Sorrell v. IMS Health, Inc., 131 S. Ct. 2653,

2664 (2011) (“This commonsense meaning of the phrase ‘content based’ requires a court to

consider whether a regulation of speech ‘on its face’ draws distinctions based on the

message a speaker conveys.”)).


content-neutral justification, or lack of ‘animus toward the ideas contained’

in the regulated speech.”271 Based on this, a code that restricts short-term

rental advertisement to only those that have received permits would likely

have to survive the gauntlet of strict scrutiny, and therefore, freedom of

speech is a legal issue worth keeping in mind.272

D. Unconstitutional Vagueness and Ambiguity

While this was another issue deemed moot in the Anderson case, it

is worth quickly noting.273 Prior to passage of a new ordinance, the definition

for short-term rental property in Nashville was “a residential dwelling unit

containing not more than four (4) sleeping rooms that is used and advertised

for rent for transient occupancy by guests. . . . “274 The definition went on to

exclude hotels, motels, and other similar establishments, which the

Andersons argued would overlap and render the ordinance unconstitutionally

vague.275 The trial court agreed.276 However, Nashville passed a new

ordinance to alter this definition that the trial court declared

unconstitutionally vague.277 The ordinance does not exempt the other

establishments but rather defines them separately.278 The court of appeals

decided that this issue was moot as well.279

However, the Eighth Circuit Court of Appeals and Arkansas

Supreme Court have recently had an opportunity to address definitions of

residential property in terms of ambiguity.280 In Dunn v. Aamodt, a restrictive

covenant restricted sites for “residential purposes,” yet the Aamodts rented

their property to friends and others as a vacation home.281 The Eighth Circuit

agreed with the Aamodts that the phrase “residential purposes” in the

271. Id. at 2228 (quoting Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 429

(1993)).

272. See generally id.

273. Anderson v. Metro. Gov’t of Nashville & Davidson Cty., No.

M201700190COAR3CV, 2018 WL 527104, at *3 (Tenn. Ct. App. Jan. 23, 2018).

274. Id. at *5.

275. Id. (“[For example,] the Andersons’ home fits the definition of a hotel. Their home

is a structure. They furnish accommodations to transients for a consideration. Their home is

occupied and intended for occupancy by transients for dwelling, lodging or sleeping

purposes. While their home is a residential dwelling unit, an element of [a short-term rental

property], the hotel definition does not exclude residences from the definition. There is no

clear line of demarcation between the terms.”).

276. Id. at *4.

277. Id. at *5.

278. Id.

279. Id.

280. See Dunn v. Aamodt, 695 F.3d 797 (8th Cir. 2012); Vera Lee Angel Revocable Tr.

v. Jim O’Bryant & Kay O’Bryant Joint Revocable Tr., 537 S.W.3d 254 (Ark. 2018).

281. Dunn, 695 F.3d at 798-99.


restrictive covenant was ambiguous and did not prohibit short-term rental of

the property.282

This opinion was cited in another Arkansas case, Vera Lee Angel

Revocable Trust v. Jim O’Bryant and Kay O’Bryant Joint Revocable Trust.283

There, a restrictive covenant prohibited a house in a subdivision from being

used for “any commercial purpose,” including purposes such as “motels” and

“hotels.”284 The Arkansas Supreme Court found that even with the specific

uses listed, it was not “clearly apparent” that short-term rentals were

prohibited.285 Therefore, based on these two cases together, leaving as little

ambiguity as possible in the ordinances is important.286

V: PROPOSED MODEL ORDINANCE

Listed below is a proposed model ordinance based on the concerns

raised in Section II. The model ordinance incorporates various approaches

that cities have used in response to these problems as demonstrated in Section

III, while also taking into account various legal concerns discussed in Section

IV. Unfortunately, many of the actual ordinances are more recent, and it is

thus difficult to determine the long-term effect of all these restrictions.

However, in reviewing the problems faced in regulating short-term rental

properties and looking at the ways that cities are already seeking to address

these problems, it is possible to combine some of the ideas into a potentially

effective model ordinance. While some cities are already addressing these

problems, the proposition below could potentially be implanted in harmony

with any already existing strategies. The model ordinance below seeks to take

some of the best ideas and combine them into a generalized, cohesive

proposal.

(1) Definitions. The following definitions apply through this

section.

(a) “Short-term rental property” is any residential

dwelling unit that is used and advertised for rent for

transient occupancy by guests for less than 30-days.

This definition is specific to this section and other

282. Id. at 801 (citing Scott v. Walker, 645 S.E.2d 278, 283 (Vir. 2007) (“‘[T]he

restrictive covenant does not by express terms prohibit the short-term rental of the [subject]

lot,’ and that ‘[i]n the absence of language expressly or by necessary implication prohibiting

nightly or weekly rentals, we find that the [defendants’] short-term rental of their property

did not run afoul of the restrictive covenant at issue.’”)).

283. Vera Lee Angel, 537 S.W.3d at 256.

284. Id. at 255.

285. Id. at 258-59 (“Certainly, if the drafters of the bill of assurance intended to prohibit

renting of property in the subdivision, they could have done so with an express provision.”).

286. See generally Dunn, 695 F.3d at 797; Vera Lee Angel, 537 S.W.3d 254.


entities, such as “hotels,” “motels,” and “bed and

breakfasts,” are defined elsewhere in this code.287

(b) “Local Contact” is an individual available for

guests to communicate with in the city. This

individual needs to be able to respond to the

property within 30 minutes.288

(c) “Owner-occupied” requires that the

homeowner reside in the residence at least 260 days

in a calendar year.

(d) “Non-owner-occupied” is a residence that the

homeowner does not reside in the residence 260

days in a calendar year.

(e) “Homeowner” is the individual who owns legal

title to the residence.

(2) Zoning. Short-term rental properties will only be

available in certain commercial and residential zones. A

zoning map with the available areas for short-term rentals

overlaid will be posted on the city’s website.289 There can be

no more than one short-term rental property per lot without

specifically appealing to the zoning board.290

(3) Permit. Before operating a short-term rental property,

the homeowner must apply to the city for a permit. This

application will include:291

287. This is an attempt to avoid the vagueness problem presented in Anderson v. Metro.

Gov’t of Nashville & Davidson Cty., No. M201700190COAR3CV, 2018 WL 527104 (Tenn.

Ct. App. Jan. 23, 2018).

288. This is an alteration of multiple cities’ requirement that there be a local contact.

Unlike BOULDER, COLO., MUN. CODE § 10-3-19(c)(5), there needs to be only one contact

instead of two, but they need to be within 30 minutes travel time as opposed to 60. This is

more specific than the requirement in CHI., ILL., MUN. CODE § 4-14-010 that the contact

maintain a residence or office located in the city, but it does similarly require that the contact

information be placed in a conspicuous place.

289. This is based on CHARLESTON, S.C., ZONING CODE § 54-227(a). The ambiguity in

the “certain” commercial and residential zones is purposeful and will be addressed in the

explanation section.

290. This is an alteration of CHARLESTON, S.C., ZONING CODE § 54-227(a), meant to

address the concerns raised in Elliott, supra note 82.

291. This section is very similar to the application process in CITY OF SANTA FE, N.M.,

LAND USE DEVELOPMENT CODE § 14-6-2.


(a) proof of ownership of the unit

(b) a site plan showing all buildings and parking

(c) floor plan showing all bedrooms and bathrooms

(d) proof of property insurance

(e) proof that short-term rental unit has had all

required inspections as required by the city code

(f) contact information, including but not limited to

full name, address, phone number, and email

address for both the local contact and the owner, as

well as signatures from both

(g) whether the property is to be used as an owner-

occupied or non-owner-occupied short-term rental

property

(4) Permit Fee. For owner-occupied short-term rental

properties, a one-time nonrefundable permit fee of $100 will

be assessed. For non-owner-occupied short-term rental

properties, a one-time nonrefundable permit fee of $150 will

be assessed.292

(5) Permit Renewal for owner-occupied. Once a

homeowner has been approved for an owner-occupied short-

term rental property, he or she must renew the short-term

rental permit every 3 years. 293 This fee will be $50.

(6) Permit Renewal for non-owner-occupied. Once a

homeowner has been approved for a non-owner-occupied

short-term rental property, he or she must renew the short-

term rental permit every 2 years. This fee will be $75.

(7) Notification. An owner must notify all property owners

with properties abutting and directly and diagonally across

from his or her residence. This can be done by a letter form,

292. This is also similar to CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE

§ 14-6-2 but differentiates between owner-occupied properties and non-owner-occupied

properties similar to NASHVILLE, TENN., SUB. ORDINANCE NO. BL2014-951.

293. This is less frequent than required in CITY OF SANTA FE, N.M., LAND USE

DEVELOPMENT CODE § 14-6-2.


which is provided on the city’s website. There is no

requirement for notified property owners to respond.294

(8) Penalty. The penalty for operating a short-term rental

property without a license will be a fine of $50 per day of

operation and an injunction from continuing operation.

Subject to judicial discretion, the subsequent issuance of a

permit to the rental owner can potentially eliminate all or

part of the daily fines and/or lift the injunction.295

(9) Basic Health and Safety Concerns. The owner of the

property shall certify that the residence is not subject to any

outstanding Building, Electrical, Plumbing, Mechanical,

Fire, Health, Housing, Police, or Planning Code

enforcement or violation.296

(10) Fire. The short-term rental property must be equipped

with smoke detectors, carbon monoxide detectors, and a fire

extinguisher. The location of the fire extinguisher must be

obvious.

(11) Insurance. Hosts must obtain liability insurance either

through a provider or, if applicable, through the short-term

hosting platform, of at least $500,000. This insurance policy

does not have to cover intentional acts.297

(12) Posting. There shall be posted in a conspicuous place

near the entrance of the dwelling a diagram identifying all

means of egress from the dwelling and building (if an

apartment), as well as the location of the fire extinguisher(s)

and the contact information of the local contact.298 This sign

should also have information related to the nearest medical

center and the address of the short-term rental property.

(13) Sanitization. The host must clean and sanitize all

dishes, utensils, pots, pans, and other cooking utensils

294. Similar to the requirements in CITY OF PORTLAND, OR., PLANNING AND ZONING

CODE § 33.207.

295. This is an alteration to the punishment in NASHVILLE, TENN., SUB. ORDINANCE NO.

BL2014-951 (seeking to give judges more flexibility to allow for remedial action by the

offender to possibly lessen the length of injunction).

296. This language is incredibly similar to S.F., CAL., ADMIN. CODE § 41A.5(g).

297. Cf. S.F., CAL., ADMIN. CODE § 41A.5 (2018), https://perma.cc/2Q2R-BWAA

(requiring hosts to carry liability insurance).

298. Cf. CHI., ILL., MUN. CODE § 4-14-040 (2018), https://perma.cc/E95A-WKXG

(requiring hosts to post a diagram identifying all means of egress).


between guests. Additionally, any leftover food, beverages,

and alcohol left by a guest must be disposed of before a new

guest stays in the residence.299

(14) Linens. Housing units must provide guests with clean

individual bath cloths and towels and clean linens. These

must be kept in good repair between guests.300

(15) Description of Unit. The listing for the unit must

include the following information:301

(a) cancellation and check-in and check-out policies

(b) a statement on whether or not the rental is

wheelchair or ADA accessible

(c) parking and any related restrictions

(d) the number of sleeping rooms, the number of

bathrooms, and the size/portion of the home that is

available to rent

(16) Advertising. A homeowner may not advertise on any

short-term rental listing site without first obtaining a permit.

Any physical signage present on the property itself must

follow all standard restrictions on sign regulation according

to the city code.302

(17) Taxation. Homeowners are required to collect and

remit Transient Occupancy Tax.303

(18) Short-Term Rental Office. The permitting fees,

permit renewal fees, and fines collected for operating a

short-term rental property shall be used to fund the Short-

299. See supra text accompanying note 98–99.

300. See supra text accompanying note 96–97.

301. Cf. § 4-14-040 (requiring similar specific listing requirements).

302. This is in response to the free speech challenge in Anderson v. Metro. Gov’t of

Nashville & Davidson Cty., No. M201700190COAR3CV, 2018 WL 527104 (Tenn. Ct. App.

Jan. 23, 2018).

303. Since a city has the choice whether or not to contract with Airbnb to collect taxes,

this Model Ordinance does not attempt to definitively sway that decision one way or the

other. The benefits and concerns are listed in Section II.


Term Rental Office. This office is charged with processing

applications and enforcing these restrictions.304

VI: REASONING FOR PROPOSED MODEL ORDINANCE

While some of the pieces of the above proposed Model Ordinance

(“M.O.”) are not directly related to any of the above issues presented, as a

whole this proposal is designed to address these various problems that have

arisen.

A. Health and Safety

An important aspect of the health and safety issue is addressed in the

definitions, and that is the local contact.305 While there were different

requirements in different cities for the local contact, M.O. section 1(b)

requires the local contact be only 30 minutes away instead of 60 minutes,

which would be beneficial and a particularly wise tradeoff with allowance of

non-owner-occupied rentals.306 It is likely that any life threatening

emergencies will be called in to 9-1-1, which has an average emergency

response time nationwide of 15 minutes, 19 seconds.307 Other emergencies

and concerns that would require calling the local contact person should

reasonably be able to be addressed in double that time, making 30 minutes a

good standard for local contact distance.308

In addition to just being available, the local contact individual is

required to sign the application along with the homeowner. This is to ensure

that the person submitting the application makes sure that the local contact is

aware of the responsibilities they will have as the local contact.309

Additionally, the contact information for this local contact person must be on

a sheet placed in a conspicuous place close to the entryway of the home.310

This is a good safety policy from the Chicago ordinance, because in a

situation where an individual needs to get in touch with the local contact, it

is easier for the guest to access contact information if it is printed and

available in a set location where it will be accessible.311

304. Cf. S.F., CAL., ADMIN. CODE § 41A.5 (2018), https://perma.cc/V42B-9JK9

(discussing an Office for Short-Term Rentals and its duties).

305. See, e.g., BOULDER, COLO., MUN. CODE § 10-3-19(c)(5) (2018),

https://perma.cc/2KL9-QXJT.

306. See CHI., ILL., MUN. CODE § 4-14-040 (2018), https://perma.cc/FKT5-SYW2;

BOULDER, COLO., MUN. CODE § 10-3-19(c)(5).

307. Emergency Response Times Across the U.S., AUTOINSURANCE CENTER,

https://perma.cc/DR2N-XRQ3 (last visited Jan. 28, 2018).

308. Note that the restriction requires the individual only needs to “be able” to respond

to the property within 30 minutes, not that the person has to.

309. See § 4-14-040.

310. § 4-14-040.

311. § 4-14-040.


Furthermore, this posted sign requires a diagram identifying all

means of egress from the dwelling and building and the location of the fire

extinguishers in the residence.312 There were 1,345,500 house fires in 2015

resulting in over 3,000 deaths and 15,700 injuries.313 Having information

available related to various escape routes could potentially help reduce the

number of fire deaths and injuries in short-term rental properties.314 While

the exits in most standard homes might be more obvious, this map of egress

from the building would be particularly helpful with short-term rentals in

apartment buildings, which also contribute to the number of deaths and

injuries from fire.315 Additionally, even though the requirement of having fire

extinguishers was not present in Chicago’s sweeping health and safety

ordinance, based on the possibility of house fires, it would be a good addition

to the Model Ordinance.316

Moreover, both the location of the nearest medical center and the

address of the short-term rental property are required to be added to this

posted sign. While neither of these were required in any of the listed

ordinances, both could additionally help to prevent emergencies. Knowing

the exact address of the location of an emergency is incredibly important

when seeking emergency assistance.317 Furthermore, since it is possible that

in an emergency situation, individuals would forget the exact location of the

short-term rental property, having this information easily viewable would be

beneficial.318

Despite Airbnb providing liability insurance up to $1,000,000, this

is not true of all the short-term rental hosting companies.319 Therefore, it is

included in M.O. section 11 that hosts must obtain liability insurance, which

is similar to what is required by San Francisco’s ordinance.320 This insurance

requirement is admittedly vague as written, since cities might have very

different homeowner’s insurance requirements to rent out a building, and the

insurance requirement is meant to be a general and adaptable rule without a

specific set monetary amount.

In relation to the general health and safety guidelines, M.O. section

9 adopts almost the identical broad language of San Francisco’s ordinance.321

312. § 4-14-040.

313. U.S. fire statistics, U.S. FIRE ADMINISTRATION, https://perma.cc/5MMC-XU9R

(last visited Jan. 28, 2018).

314. See generally § 4-14-040.

315. See generally Apartment structure fires, NAT’L FIRE PROT. ASSOC.,

https://perma.cc/7QFA-RZKQ (last visited Apr. 29, 2018).

316. See § 4-14-040; see also KNOXVILLE, TENN., ORDINANCE O-245-2017 (Nov. 21,

2017), https://perma.cc/VXM4-CMBE (an ordinance that was recently passed and will

require fire extinguishers).

317. See generally Top 10 Tips for Calling 9-1-1, NENA, https://perma.cc/QL22-

MUHC (last visited Jan. 28, 2018).

318. Id.

319. Fishman, supra note 126.

320. See S.F., CAL., ADMIN. CODE § 41A.5 (2018), https://perma.cc/PGS4-2WD2.

321. Id.


This is because many cities already govern parking, electrical, plumbing, and

other requirements separately, so allowing the existing entities to do their

jobs as opposed to imposing new additional specific requirements for short-

term rental properties seems the best route for many general matters.

However, certain home concerns such as smoke detectors and fire

extinguishers are properly regulated more extensively for short-term rentals,

as in Chicago and Knoxville.322

Also similar to Chicago’s ordinance is the M.O. section 15’s

requirement of an accurate listing, including information related to parking,

ADA accessibility, and number of rooms.323 This helps to prevent inaccurate

or deceptive listings on the site, which is a commonly occurring issue.324

Finally, Chicago’s requirements related to sanitization and linens are

recreated in M.O. sections 13 and 14 respectively.325 These requirements,

while perhaps seeming excessive for hosts, will help prevent issues and

mitigate common cleanliness complaints of guests.326 Even if a homeowner

is renting a residence as a non-owner-occupied rental, there are cleaning

services in most major cities that will take over the cleaning of short-term

rental properties.327 All of these health and safety requirements, while not

perfect, help alleviate some of the concerns raised in Section II(A).

B. Zoning

M.O. section 2 is purposefully vague here. Even though many cities

still use some form of zoning, there are many different techniques

implemented, and thus it would be difficult to make a model rule with regard

to zoning.328 However, finding out whether a certain property is eligible for

a short-term rental property is potentially difficult, so utilizing the Charleston

overlay-style map for users seemed like a great technique to encourage

here.329 While zoning maps are generally easily accessible, for a potential

host who is perhaps not familiar with reading zoning maps and zoning code

texts together, the overlay system makes an easy system to find whether or

not a specific property is eligible to be rented.330

322. See § 4-14-040 (2018), https://perma.cc/3RVB-VYNC; KNOXVILLE, TENN.,

ORDINANCE 16-612(2)(c) (July. 30, 2017), https://perma.cc/6G2X-SCLD.

323. See CHI., ILL., MUN. CODE § 4-14-040.

324. See Sarah Schlichter, 7 Airbnb Problems and How to Solve Them,

SMARTERTRAVEL (June 19, 2017), https://perma.cc/53H2-KTLP.

325. See § 4-14-040.

326. See Ryan Holiday, Airbnb Etiquette: A Wake-Up Call to Unprofessional Hosts,

OBSERVER (Mar. 19, 2014), https://perma.cc/2VG6-3FZS.

327. 5 Ways to Effectively Improve Your Airbnb Cleaning, LEARN AIRBNB,

https://perma.cc/7QTH-ARUU (last visited Jan. 28, 2018).

328. Property Topics and Concepts, THE AM. PLANNING ASSOC.,

https://perma.cc/S4M5-BDSR (last visited Jan. 28, 2018).

329. See CHARLESTON, S.C., ZONING CODE § 54-227 (2018), https://perma.cc/ZRB5-

WR4Z.

330. See generally § 54-227.


One thing left off of M.O. section 2 is Chicago’s neighborhood

petition to local alderman to introduce an ordinance which creates a restricted

residential zone.331 While this could mitigate some potential neighborhood

issues, having the city decide the zoning for itself seemed like a better idea

since the city is the entity creating and maintaining an Office for enforcement

of these rules.332

C. Permitting

M.O. sections 3 through 7, which relate to permitting, are, for the

most part, adaptations of the Santa Fe ordinance.333 However, there are some

differences. Almost all of the required items in M.O. sections 3(a) through

(g) are the same as what is required in Santa Fe.334 The first distinction is the

requirement in M.O. section 3(f), which requires the contact information and

the signatures for both the local contact and the owner. The reasoning for this

was addressed in the Health and Safety section.

The next difference, which runs through a lot of this section, is in

M.O. section 3(g), which requires the applicant to state whether the property

is owner-occupied or non-owner-occupied.335 Even though some cities, such

as Nashville, are phasing out non-owner-occupied rentals in residentially-

zoned neighborhoods, this Model Ordinance embraces them, but adds more

requirements for homeowners wanting to run this type of short-term rental

property.336 The one-time permit fee is more expensive for a non-owner-

occupied property. Additionally, the permit renewal for a non-owner-

occupied property is both more frequent and more expensive than for an

owner-occupied property. The increased expense is for two reasons. First,

because it costs more to obtain a non-owner-occupied permit, this will make

permits for non-owner-occupied rentals more difficult to obtain and

potentially less appealing. Second, restrictions on non-owner-occupied

rentals may be more difficult to enforce since the owner of the property will

rarely if ever be on the property, so charging more for these permits will help

support the office mentioned in M.O. section 18.

Finally, there is a similar notification method to Portland’s ordinance

in M.O. section 7.337 While there is no requirement for the neighbors to

331. See CHI., ILL., MUN. CODE § 4-17-040 (2018), https://perma.cc/MAD9-RNWD;

see also supra text accompanying notes 131–37.

332. See § 4-17-040; S.F., CAL., ADMIN. CODE § 41A.5 (2018), https://perma.cc/Y6ZZ-

3D7V.

333. See CITY OF SANTA FE, N.M., LAND USE DEVELOPMENT CODE § 14-6-2 (2018),

https://perma.cc/CC4E-D62G.

334. § 14-6-2


https://perma.cc/NQ4U-ANH9.

336. Id.; Garrison, supra note 172.

337. See CITY OF PORTLAND, OR., PLANNING AND ZONING CODE § 33.207 (2018),

https://perma.cc/6Y2F-BX8H.


respond, at least informing the neighbors what is going to be occurring at the

rental property will hopefully prevent some surprise when strangers are in

the neighborhood.338 This section seeks to unambiguously specify which

neighbors must be informed to avoid any vagueness or ambiguity issues.339

Additionally, under M.O. section 16, advertising on the property is

permitted to the extent that it would already be allowed in the city’s sign

code. Since this issue was deemed moot in Anderson based on changes in the

code between the filing of the complaint and the court addressing the various

challenges, this provision is likely enough.340 Whether or not the sign code

itself can pass freedom of speech strict scrutiny is outside of the scope of this

note and would depend on the specifics of the city code, so this Model

Ordinance only seeks to address problems with content differentiation

between short-term rental signage and other signage.341

D. Taxation

The taxation section, similar to the zoning section, is relatively vague

as it is written. A lot of the issue with taxation depends on a city’s willingness

to negotiate with Airbnb and other companies, and as mentioned in Section

III, this potentially involves a lot of sacrifices.342 Therefore, whether or not a

city is willing to make these sacrifices for tax revenue is up to the city, and it

is thus hard to make a Model Ordinance section about taxation that can be

applied to any city. That being said, if a city is not willing to negotiate with

Airbnb to receive tax remittance, requesting owners to remit and self-report

related taxes would likely be in the cities’ best interest.

E. Enforceability

One of the goals of the Model Ordinance was for it to be simple

enough that not only do potential hosts know what is required of them, but

that it is easy to tell when somebody is violating the short-term rental laws.

In regard to definitions, after seeing the challenge of unconstitutional

vagueness in Tennessee, terms such as “hotel” and the like are left to be

defined elsewhere in the city code.343

Additionally, the amount of fines varies greatly. While Miami is

going the extreme route, M.O. section 8 is more akin to what Nashville is

doing and providing a daily fine for operating without a permit.344 The

338. § 33.207

339. See generally Anderson v. Metro. Gov’t of Nashville & Davidson Cty., No.

M201700190COAR3CV, 2018 WL 527104 (Tenn. Ct. App. Jan. 23, 2018).

340. Id.

341. Id. See generally Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015).

342. See Griswold, supra note 189.

343. Anderson, 2018 WL 527104.


https://perma.cc/5ATB-7LPG; Kartch, supra note 206.


additional phrase that “[s]ubject to judicial discretion, the subsequent

issuance of a permit to the rental owner can potentially eliminate all or part

of the daily fines and/or lift the injunction” is to prevent a situation where

fines build up over time to reach Miami levels before going in to court.345

The idea of having a short-term rental office as opposed to a few

employees is similar to San Francisco’s ordinance.346 While this might be

impractical in a smaller city, in a larger city this would be a good solution,

so it would allow a group of people to specialize in short-term rental

enforcement.

VII: CONCLUSION

There are many issues going forward related to regulating short-term

rental properties, and it is impossible to address them all in anything short of

a textbook. However, the above proposed solutions to some of the problems

presented show that cities are slowly making progress. While no one city has

completely revolutionized the way that short-term rental properties are

regulated, nor has any one city been entirely successful with regulating this

market, almost all of the Model Ordinance provisions are based in some part

on many of the listed cities’ ordinances.

Some of the presented issues are dependent on cities and Airbnb

cooperating—in particular, taxation and enforcement. Both sides may have

to concede things that neither are currently willing to concede. Other issues

like zoning will be dependent on the city’s existing ordinances. However,

some problems such as how to address health and safety concerns, as well as

methods of providing permits, are more easily addressed broadly by the

Model Ordinance.

Finally, there will continue to be legal issues presented with almost

any regulation that is passed. Nashville, Los Angeles, and San Francisco have

all recently been faced with Airbnb-related lawsuits that have brought up

unique legal issues.347 Going forward, it will be interesting to see what issues

continue to arise in both the short-term rental industry and the sharing

economy as a whole. As this market continues to grow and change, so must

the ways cities approach regulating it. While there may not truly be any long-

term solutions to this short-term rental problem, there has certainly been

progress.

345. See Kartch, supra note 206; Trager, supra note 212.

346. See S.F., CAL., ADMIN. CODE § 41A.5 (2018), https://perma.cc/3VTU-9WX4.

347. As of the date of publication of this article, Airbnb is currently suing New York

City over a new law that requires sharing host information. See Glenn Fleishman, Airbnb

Sues New York Over Law That Demands Host Information, FORTUNE (Aug. 24, 2018),

https://perma.cc/5XG8-PXAM.

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